Shops not passing on VAT cut

howthe said:
However, as a home owner Fox, that 73p does make a difference over time, as silly as that may sound. Over the next couple of years (I believe that was the projected time frame for keeping this VAT rate?) you are talking about a significant saving.
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The VAT saving is for 1 year and 1 month. If you spend £10,000 in that period of time on VATable products you'd save 210 quid. And if you are spending 10 grand a year on VATable products you are pretty affluent and won't notice the £210. If you WOULD notice the £210 you won't be spending the levels required to see a saving like that.

Thats the point I'm making. Yes, it all adds up, but it only all adds up if you have a high level of spending. Which would mean you don't really need the help. Those who DO need help through these tough times and are close to the breadline are not spending thousands of quid on products with VAT on them.

The key to surviving recession is that business remains profitable. The VAT cut has added considerable extra expense for business. How is this remotely sensible? Never mind that businesses now pay an extra 2p a litre for fuel because they don't pay VAT, or that they have to spend thousands repricing everything..... you can save 21 quid if you spend a grand!

Not much use if your company makes redundancies to save the money...

But then what would I know, I've paid more Vodafone bills than EDF Energy bills so I'm an economy noob!
 
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I know at my work all prices are getting kept the same and money is recalculated at the till. Or at the basket if using the website.
The VAT is getting recalculated on the purchase price, though, not on the selling price which makes it a slightly less than a 2.5% saving on the actual selling price.
Customers are saving 21p in every £10 they spend. Woo...
 
Sorry, I actually thought it was for 2 years.

However, £210 is still going to pay my petrol getting to and from work for about 5-6 weeks so not that bad.

Plus I am getting married early next year so believe me, every penny counts! :)

My brain is fried because I've still got the flu and haven't slept properly in days (as you will notice from my posting last night) however isn't it £250? Or am I missing something in my calculations? Or is it a case of what Dogma just posted above?
 
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Went into tescos today - all over the shop they talked about vat cuts etc - However, they hardly had any deals on and my shopping bill was £7-8 more expensive than normal!
 
Whilst the good point has been made that it might not be economically viable to reprice everything and so on, I have to firmly agree with dirtydog regarding the value of money.

I lived at home whilst studying at uni and regrettably I 'wasted' most of the student loan that I didn't really need on all kinds of crap (this is just an example of how I thought then - so don't go pointing out I shouldn't have got a loan :p)

Now I've been working for about 15 months my outlook regarding money has completely changed, and no it's not because I'm 'tight'. I do have some extravagant purchases possibly coming up but whether it costs upwards of £10,000 or less than a tenner every penny makes a difference.

How can 73p not seem like a big difference? How can waiting for that extra 73p to be shelled out to you from the cashier make a world of difference -- that 73p could buy me a loaf of bread for the week :), that 73p might make the difference in being able to pay the bus fair - reminds me of something my mum says regarding saving pennies to make pounds and that a cashier wouldn't let you purchase the £1 item if you're a penny short (well, they would but you get the idea :p)
 
howthe said:
However, £210 is still going to pay my petrol getting to and from work for about 5-6 weeks so not that bad.
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Only if you spend £10,000 on VAT rated products over the course of a year.

howthe said:
My brain is fried because I've still got the flu and haven't slept properly in days (as you will notice from my posting last night) however isn't it £250? Or am I missing something in my calculations? Or is it a case of what Dogma just posted above?
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You are missing something in your calculations. A 2.5% cut in VAT does not equal a 2.5% reduction in the overall price it actually equates to a 2.13% reduction in the overall price.
 
[TW]Fox;13002921 said:
The VAT saving is for 1 year and 1 month. If you spend £10,000 in that period of time on VATable products you'd save 210 quid. And if you are spending 10 grand a year on VATable products you are pretty affluent and won't notice the £210. If you WOULD notice the £210 you won't be spending the levels required to see a saving like that.
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Well, most of our salaries go into VATable products. Average household income of non-scrooging, mortgage paying family in UK is £52,400 per annum. Over 60% of which is spent outside mortgage and savings. Which means that unless we presume majority use black market and grey import for their weekly shopping, most of us in UK will save between 700-800 pounds a year on 2.5% lower VAT as a rough estimation. Thanks for little mercies, maybe, but I'm sure as hell not going to leave that kind of money behind on a counter.
 
I'm just trying to work out how much my monthly salary i spend on VATable goods and services at 17.5%. My biggest monthly outgoings each month are rent, council tax and utility bills. I don't think VAT cut applies to those. Only a small proportion of my food shop will have VAT charged as well.
 
[TW]Fox;13002921 said:
The VAT saving is for 1 year and 1 month. If you spend £10,000 in that period of time on VATable products you'd save 210 quid. And if you are spending 10 grand a year on VATable products you are pretty affluent and won't notice the £210. If you WOULD notice the £210 you won't be spending the levels required to see a saving like that.

Thats the point I'm making. Yes, it all adds up, but it only all adds up if you have a high level of spending. Which would mean you don't really need the help. Those who DO need help through these tough times and are close to the breadline are not spending thousands of quid on products with VAT on them.

The key to surviving recession is that business remains profitable. The VAT cut has added considerable extra expense for business. How is this remotely sensible? Never mind that businesses now pay an extra 2p a litre for fuel because they don't pay VAT, or that they have to spend thousands repricing everything..... you can save 21 quid if you spend a grand!

Not much use if your company makes redundancies to save the money...

But then what would I know, I've paid more Vodafone bills than EDF Energy bills so I'm an economy noob!
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I agree with that comment, but I beleive the context is wrong. That £210 is likely to not be noticed, but it is also likely to go back into the economy one way or another.

The whole point was to have less money in government coffers this coming year and more in the economy.
 
Lakeland reduced all their prices on saturday. It's horrible as now all the prices are idiotic things like £4.88 and £3.36 :/
 
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